El Paso Electric rate case resolved, residential solar-specific charges dropped

Written By: Stratton Report
August 18, 2016

El paso electric

On August 18, El Paso Electric announced that the PUC of Texas had approved a final order in the utility’s rate case.

The PUCT order provides for an annual non-fuel base rate increase of $37 million, a lower annual depreciation expense of approximately $8.5 million, a return on equity of 9.7%, an additional annual non-fuel base rate increase of $3.7 million related to Four Corners Generating Station costs, which will be collected through a surcharge terminating on July 12, 2017, the elimination of the separate treatment for residential customers with solar systems, and recovery of $3.1 million in rate case expenses through a separate surcharge.

According to the Alliance for Solar Choice, the elimination of the solar-specific demand charge for residential customers with solar systems in the EPE rate case was part of a growing trend across the country. The association claimed that in the past two years and across ten states, all proposals by investor-owned utilities to implement mandatory demand charges on residential or solar customers have failed. Per the Alliance, a recent example was when local and national solar groups and ratepayer advocates worked with AEP utility subsidiaries in Tennessee and Oklahoma to dismiss or withdraw proposed demand charges. And earlier in August, over twenty stakeholders in Colorado collaborated to file a settlement that removes a confusing grid usage charge, which would have been a precursor to demand charges, in Xcel’s general rate case. Instead, parties agreed to test consumer-friendly time-of-use rates for homeowners.

Amy Heart, Director of Public Policy for Sunrun and spokesperson for The Alliance for Solar Choice remarked:

“Across the country, some of the country’s largest utilities and other stakeholders are coming together and agreeing that residential demand charges are not the way forward. Consumers want choices and smart rate structures that enable more investment in rooftop solar, and state leaders are largely united in their resolve to reject punitive demand charges and protect a clean energy future.”

Mary Kipp, El Paso Electric CEO commented: “While we are pleased that we have come to a resolution in our rate case, we understand the current economic impacts affecting our growing community. As a member of this community for 115 years, we have been dedicated to the long-term success and well-being of our region. As we continue to see solid customer growth, we remain committed to making prudent investments to meet increasing demand. By using cost-effective technologies and making environmentally conscious decisions, we are making our power grid more dependable, safer and cleaner for future generations.”

As EPE’s two new generating units at the Montana Power Station come online in 2016, EPE anticipates filing new rate cases in Texas and New Mexico in early 2017.